Employees with monthly PF wages between ₹15,000 and ₹25,000 may see a higher employee provident fund deduction from October 2026 after the statutory PF wage ceiling was increased.
The ceiling has been raised from ₹15,000 to ₹25,000, with the revised limit coming into effect on September 17, 2026. September involves a proportionate calculation under the old and new limits, while October will be the first full wage month under the revised rules.
For example, an employee with PF wages of ₹20,000 would contribute ₹2,400 per month to EPF from October, compared with ₹1,800 under the earlier ₹15,000 ceiling.
EPF Calculation on ₹20,000 PF Wages
According to EPFO’s illustration, the employee contribution is calculated at 12% of PF wages. On ₹20,000, this works out to ₹2,400 per month.
The employer also contributes ₹2,400. However, the employer’s share is divided between the Employees’ Pension Scheme (EPS) and the EPF account.
Under the October 2026 illustration, ₹1,666 of the employer’s contribution goes towards EPS, while the remaining ₹734 is credited to EPF.
| Contribution | Monthly Amount |
|---|---|
| Employee EPF contribution (12%) | ₹2,400 |
| Employer EPS contribution (8.33%) | ₹1,666 |
| Employer EPF contribution (3.67%) | ₹734 |
| Total employee + employer contribution | ₹4,800 |
These figures are based on EPFO’s illustration for the October 2026 wage month.
What Changes for Existing EPF Members?
The revised wage ceiling also affects certain existing EPF members who were previously covered by EPF but were not part of EPS because their wages exceeded the earlier ₹15,000 limit.
EPFO states that an existing EPF member earning ₹20,000 who was not an EPS member will be required to enter EPS following the increase in the ceiling, subject to the applicable provisions.
As a result, the employer’s contribution will be divided between EPS and EPF instead of being credited entirely to the provident fund account.
Under the previous ₹15,000 ceiling, the employee contribution in the EPFO illustration was ₹1,800, while the employer contributed ₹1,250 to EPS and ₹550 to EPF. With ₹20,000 becoming the applicable PF wage, the employee contribution rises to ₹2,400, while the employer contributes ₹1,666 to EPS and ₹734 to EPF.
This means the employee’s monthly EPF contribution increases by ₹600 in the ₹20,000 PF-wage example.
Will Every Employee Contribute on ₹25,000?
No. The revised ₹25,000 figure represents the statutory wage ceiling and does not mean every employee will automatically have PF calculated on ₹25,000.
If an employee’s applicable PF wages are below ₹25,000, the contribution will be calculated with reference to those wages. EPFO has also clarified that PF wages and gross salary are not necessarily the same.
For example, EPFO’s October illustration shows an employee contribution of ₹1,200 for PF wages of ₹10,000, ₹2,400 for ₹20,000 and ₹3,000 when PF wages reach the revised ₹25,000 ceiling.
How Will the Change Affect Take-Home Salary?
Employees whose PF contributions were earlier limited to the ₹15,000 ceiling may see a higher monthly deduction from their salary.
In the ₹20,000 PF-wage example, the employee contribution increases from ₹1,800 to ₹2,400, resulting in an additional ₹600 deduction each month. The employer’s contribution also rises from ₹1,800 to ₹2,400, although the employer’s share is divided between EPS and EPF.
The actual effect on take-home salary will depend on the employee’s existing PF arrangement and overall salary structure.
EPFO has also clarified that the employee’s statutory contribution and the employer’s contribution are legally separate. The employer’s share cannot simply be treated as an employee deduction by presenting it as part of the employee’s CTC.
Disclaimer
The calculations in this article are based on the EPFO illustrations and the revised statutory wage ceiling described in the source material. Actual PF contributions may vary depending on an employee’s applicable PF wages, salary structure and eligibility under the relevant EPF and EPS provisions. Employees should check their salary records and official EPFO notifications for information applicable to their individual circumstances.